Announcement
MKTUPDTE: RAK: Rakon upgrades earnings guidance and appoints new director
08:38am
RAK
29/09/2021 08:38
MKTUPDTE
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MKTUPDTE: RAK: Rakon upgrades earnings guidance and appoints new director
29 September 2021
Rakon upgrades earnings guidance and appoints Steven Tucker to the Board
Rakon (NZX: RAK), a world leader in the provision of advanced frequency
control and timing solutions, today announces an upgrade to its earnings
guidance for the year ending 31 March 2022 (FY2022).
It also announces the appointment of Steven Tucker to the board as an
Independent Non-executive Director with effect from 1 October 2021.
Earnings guidance
Rakon now expects to achieve Underlying EBITDA in the range of $39
million-$44 million in FY2022. This is higher than the guidance provided on 1
April 2021 of $27 million-$32 million, as well as the indication given at the
Annual Shareholders' Meeting on 12 August 2021 that FY2022 results were
expected to be at the top of that range.
Chair Bruce Irvine said that a key factor in Rakon's FY2022 expected revenue
and earnings is the significant orders for its TCXO2 secured as a result of
an extensive chip shortage caused by a fire at a factory of AKM, the world's
largest TCXO Integrated Circuits manufacturer. There has also been a
concurrent consumer device boom.
"While customer orders were in hand at the time of the 1 April guidance, we
also needed to factor in a number of risks and uncertainties around our
ability to deliver and at what cost. These included having to add the
necessary manufacturing capacity; procurement of raw materials and parts;
adapting design specifications and other production uncertainties. However,
over the last five months these risks and uncertainties have not materially
eventuated."
Mr Irvine said for the remainder of FY2022, our core business is expected to
perform well, particularly in 5G where demand for our products going into 5G
network equipment has been stronger than anticipated." However, the company
is still experiencing supply chain volatility and is mindful of the risk of
future disruption at manufacturing sites due to Covid-19.
Looking further ahead to FY2023, Rakon expects TCXO demand to return to
normal levels, and its core business to continue on its growth trajectory on
the back of 5G rollouts and the demand for Rakon applications in datacentres,
industrial positioning and new space.
Appointment of Steven Tucker
Mr Irvine said the Board was delighted with Mr Tucker's appointment. "Steve
is a professional director with extensive governance and senior executive
experience across privately owned, public sector and listed companies in the
technology sector.
"He brings more than 20 years' experience as a senior executive at Gallagher,
a leading New Zealand export company with global operations focused on
research and development, design, manufacturing and marketing. We believe
this experience is highly relevant to the governance, risk management and
strategy development of Rakon. Steve's skills and knowledge will complement
those of our existing Board members, who are looking forward to working with
Steve."
Mr Tucker has been appointed as an additional director in accordance with
Rakon's Constitution and will put himself forward for election by
shareholders at the next Annual Shareholders' Meeting. The appointment
increases Rakon's Board to seven Directors and raises the number of
Independent Directors to five.
Mr Irvine who was re-elected to the Board at the 2021 Annual Shareholders'
Meeting said the appointment of Steve Tucker is part of the Board's current
succession planning which includes his own intention to step down once the
Board is satisfied the succession planning process is complete.
Notes to Editors
About Steven Tucker
Mr Tucker is currently the Chair of Gallagher Holdings Limited and Goodnature
Limited. He is also a Director of HJ Asmuss and Co Ltd, Taska Prosthetics
Limited and 5th Element Limited and a number of other private companies. Mr
Tucker is also the chair of the Caprine Innovations NZ Programme. He was
previously a director of publicly listed Methven Limited, a councillor of
Waikato Institute of Technology and Trustee of St Peters School Cambridge.
In addition to his governance experience Mr Tucker has over 20 years'
management experience including as Deputy Chief Executive and as Group
Executive Operations, and Group Executive Finance, at Gallagher, with
experience across financial and risk management, investment management and
mergers and acquisitions, brand, culture and innovation and manufacturing and
supply chain optimisation.
Mr Tucker is a Chartered Member of the Institute of Directors in New Zealand
and a Fellow of the Institute of Chartered Accountants. Mr Tucker has a
Bachelor of Management Studies from University of Waikato and has attended
the Executive Management Program at Darden University in the USA.
-ends-
Investor contact:
Brent Robinson
Managing Director
+649 573 5554
Anand Rambhai
Chief Financial Officer
+64 9 571 9225
Media contact:
Richard Inder
The Project
+64 21 645 643
End CA:00379979 For:RAK Type:MKTUPDTE Time:2021-09-29 08:38:12
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